What Is a Good DSCR for Datacenter Financing? (2026 Calculator)
A good DSCR for datacenter financing is 1.25x-1.50x for senior debt. Lenders typically require minimum 1.20x for investment-grade borrowers, while GPU-heavy facilities may need 1.35x+ due to technology obsolescence risk.
- Senior Debt Minimum: 1.20x-1.25x DSCR
- GPU Financing: 1.30x-1.50x DSCR
- Cash Sweep Trigger: Below 1.10x DSCR
- Power Cost Impact: $0.01/kWh = 0.05-0.10x DSCR
Try the DSCR Calculator
Enter your datacenter assumptions below. See how revenue, operating costs, and debt service impact your coverage ratio.
Revenue Assumptions
Operating Expenses
Debt Service
Include principal + interest. For interest-only periods, enter interest only.
How Do You Calculate Datacenter DSCR?
DSCR = NOI / Total Debt Service
Where NOI = Revenue - Operating Expenses
Revenue Components
- • Colocation fees ($/kW/month)
- • GPU compute revenue ($/GPU-hour)
- • Network/interconnection fees
- • Managed services revenue
- • Power pass-through markup
Operating Expenses
- • Power costs (40-60% of OpEx)
- • Cooling & mechanical
- • Staffing & security
- • Maintenance & repairs
- • Insurance & property taxes
Example Calculation
A 10MW datacenter with $12M annual revenue and $7M operating expenses has $5M NOI. With $3.5M annual debt service (P+I), DSCR = $5M / $3.5M = 1.43x. This exceeds most lender requirements.
What DSCR Do Different Lenders Require?
| Lender Type | Min DSCR | Typical Range | Key Requirements |
|---|---|---|---|
| Commercial Banks | 1.25x | 1.25x-1.40x | Investment-grade tenant, long-term leases |
| Private Credit | 1.20x | 1.20x-1.35x | Covenant-heavy, cash sweep provisions |
| GPU Lenders (ABL) | 1.30x | 1.30x-1.50x | Equipment appraisals, refresh reserves |
| Infrastructure Funds | 1.15x | 1.15x-1.30x | PPA in place, contracted revenue |
| CMBS/Securitization | 1.35x | 1.35x-1.50x | Debt yield >9%, diversified tenants |
Source: Analysis of 50+ datacenter financing transactions (2024-2026)
How Does Power Cost Affect Datacenter DSCR?
Power represents 40-60% of datacenter operating costs. For GPU-dense facilities in ERCOT markets, power cost volatility directly impacts DSCR. Here's the sensitivity analysis:
| Power Cost ($/kWh) | Annual Impact (10MW) | DSCR Change | Covenant Risk |
|---|---|---|---|
| $0.03 | $2.6M | Base Case | Low |
| $0.05 | $4.4M (+$1.8M) | -0.15x to -0.20x | Medium |
| $0.08 | $7.0M (+$4.4M) | -0.35x to -0.45x | High |
| $0.12 (stress) | $10.5M (+$7.9M) | -0.60x to -0.80x | Breach likely |
What Covenants Accompany DSCR Requirements?
Financial Covenants
- Minimum DSCR1.20x-1.35x
- Maximum LTV60-70%
- Minimum Debt Yield8-10%
- Cash Sweep Trigger<1.10x DSCR
Operational Covenants
- GPU Refresh Reserve5-10% of revenue
- Capex Reserve$50-100/kW/year
- Insurance Coverage100% replacement
- Uptime SLA99.99%+
Our Methodology
This DSCR analysis is based on:
- Data sources: 50+ datacenter financing transactions (senior debt, mezz, ABL)
- Lender coverage: Commercial banks, private credit funds, infrastructure investors
- Market data: ERCOT power pricing via our Power-Adjusted Yield (PAY) index
- Update frequency: Quarterly covenant analysis, monthly power cost tracking
- Last updated: January 8, 2026
Limitations: DSCR requirements vary significantly by sponsor credit quality, asset location, and market conditions. Consult your lender for specific covenant requirements.
Frequently Asked Questions
What is a good DSCR for datacenter financing?
A good DSCR for datacenter financing is typically 1.25x-1.50x for senior debt. Lenders require minimum 1.20x for investment-grade borrowers, while GPU-heavy facilities may need 1.35x+ due to higher technology obsolescence risk.
How do curtailment events impact DSCR?
ERCOT curtailment events can reduce revenue 5-15% during summer peaks, directly impacting DSCR. Model curtailment risk using our CSS (Curtailment Stress Score) and stress-test DSCR with 10-20% revenue reduction scenarios.
What is the difference between DSCR and ICR?
DSCR (Debt Service Coverage Ratio) covers both principal and interest payments, while ICR (Interest Coverage Ratio) only covers interest. For amortizing datacenter loans, DSCR is more relevant; for bullet/IO structures, ICR may be primary.
What DSCR do GPU lenders require?
GPU lenders typically require 1.30x-1.50x DSCR for equipment financing due to rapid depreciation risk. Asset-backed GPU loans may have DSCR covenants as low as 1.15x if combined with strong LTV coverage and cash sweep provisions.
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CSS (Curtailment Stress Score)
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Open ToolModel Your Datacenter DSCR
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